Tax on property income in Croatia

Effective Tax Rate on Rental Income

INDIVIDUAL TAXATION

Nonresident individuals are taxed on their Croatian-sourced income. Married couples are taxed separately.

INCOME TAX

Personal allowances extended to both domestic and foreign taxpayers are not applicable to property income.

Rental Income Tax

Rental income from property is taxed at 12%, with allowed deductions fixed at 30% of the gross rent.

Local Surcharges

Surtax is levied on top of the tax due from taxpayers by local authorities at the following rates:

Maximum of 10% for communities

Maximum of 12% for cities with the population of less than 30,000

Maximum of 15% for cities with the population of more than 30,000

Maximum of 30% for the capital city, Zagreb

CAPITAL GAINS TAX

Capital gains from the sale of immovable property are subject to a flat withholding tax rate of 24%. Allowable deductions are the acquisition cost of the property as adjusted by inflation and the fees incurred in the transfer.

The sale of real estate is exempt from capital gains tax if (1) the sale took place more than three years from the date of purchase, or (2) if the property was used as the residence of the taxpayer and/or dependent members of the taxpayer´s family, (3) or the sale was directly connected with a divorce or an inheritance.

VALUE ADDED TAX (VAT)

VAT is waived on the leasing of housing premises.

PROPERTY TAX

Real Estate Tax

The proposed real estate tax would be levied at a flat rate of 1.5%. The tax base is around 70% of the estimated market value of the property.

Tax on Holiday Homes

Tax on holiday homes are payable by owners of holiday homes in Croatia. The tax is levied on the useful area of the property. The tax is HRK5 (€0.65) to HRK15 (€2) per square meter, depending on the municipality or town where the property is located.

Croatia - More data and information

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